Prices of top-quality municipal bonds were flat to weaker at mid-session, traders said, as the last of the week's big new issues were coming to market on Thursday.
Secondary Market
The yield on the 10-year benchmark muni general obligation was as much as one basis point stronger from 2.09% on Wednesday, while the yield on the 30-year GO was steady at 3.10%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were lower on Thursday, with the yield on the two-year Treasury rising to 0.85% from 0.82% on Wednesday, while the 10-year yield rose to 2.26% from 2.23% and the 30-year yield increased to 3.01% from 3.01%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 93.7% versus 94.2% on Tuesday, while the 30-year muni to Treasury ratio stood at 103.5% compared to 103.4%, according to MMD.
Primary Market
Citigroup priced for institutions the Massachusetts Commonwealth Transportation Fund's $450 million of Series 2015A special obligation revenue bonds under the Rail Enrichment Program. The issue was priced for retail investors on Wednesday.
The bonds were priced to yield from 0.70% with 3% and 5% coupons in a split 2018 maturity to 2.00% with 4% and 5% coupons in a split 2024 maturity; and from 3.48% with a 5% coupon in a 2028 to 3.05% with a 5% coupon in 2037. A split 2040 maturity was priced as 4s to yield 3.48% and as 5s to yield 3.13% and a split 2045 maturity was priced as 4s to yield 3.60% and as 5s to yield 3.20%. A 2017 maturity was offered as a sealed bid.
On Wednesday, the bonds were priced for retail to yield from 0.70% with 3% and 5% coupons in a split 2018 maturity to 2.02% with 4% and 5% coupons in a split 2024 maturity, and priced as 3 1/4s to yield 3.40% in a 2035 maturity, as 4s to yield 3.48% and as 5s to yield 3.13% in a split 2040 maturity, and as 4s to yield 3.55% in half of a split 2045 maturity. A 2017 maturity was offered as a sealed bid and no retail orders were taken in the 2031 through 2035 maturities or in the other half of the split 2045 maturity.
The bonds were rated triple-A by Moody's Investors Service and Standard & Poor's.
Morgan Stanley priced the state of Hawaii's $245.14 million of airport system Series 2015A AMT and Series 2015B non-AMT revenue bonds. The $235.92 million of AMT bonds were priced as 5s to yield 3.90% in 2041 while a 2045 split maturity was priced as 4 1/8s to yield 4.20% and as 5s to yield 3.95%. The $9.23 million of non-AMT bonds were priced as 4s to yield 4.08% in a 2045 bullet maturity.
The bonds were rated A1 by Moody's, A-plus by S&P and A by Fitch Ratings.
In the competitive arena, the Metropolitan Atlanta Rapid Transit Authority sold $182 million of Series 2015B Third Indenture Series sales tax revenue bonds.
Wells Fargo Securities won the issue with a true interest cost of 3.45%. The bonds were priced to yield from 1.46% with a 5% coupon in 2021 to 2.90% with a 3% coupon in 2029 and priced as 5s to yield from 3.29% in 2041 to 3.34% in 2045.
The issue was rated Aa2 by Moody's, AA-plus by S&P and AA-minus by Fitch.
Previously, MARTA sold comparable bonds on April 14, when JPMorgan Securities won $87 million of the Series 2015A sales tax revenue bonds with a true interest cost of 4.08%.
On Thursday afternoon, Barclays Capital is slated to price the California Health Facilities Financing Authority's $378 million of Series 2015 refunding revenue bonds for the Cedars-Sinai Medical Center after a retail order period on Thursday morning. The issue was rated Aa3 by Moody's and AA-minus by Fitch.
Since 2005, the HFFA has issued about $15.7 billion of debt, with the most issuance occurring in 2009 and 2011 when it sold $2.24 billion and $2.33 billion, respectively.
The HFFA sold the least amount of bonds in 2010 and 2014 when it issued and $713 million and $500 million, respectively.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $59.7 million, bringing total net assets to $245.17 billion in the period ended Nov. 2, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $607.7 million to $245.23 billion in the previous week.
The average, seven-day simple yield for the 374 weekly reporting tax-exempt funds remained at 0.01% for the 131st straight week.
The total net assets of the 951 weekly reporting taxable money funds fell $8.16 billion to $2.494 trillion in the period ended Nov. 3, after an inflow of $24.96 billion to $2.502 trillion the previous week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 42nd week in a row.
Overall, the combined total net assets of the 1,325 weekly reporting money funds decreased $8.22 billion to $2.739 trillion in the period ended Nov. 2, which followed an inflow of $24.36 billion to $2.748 trillion the week before.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,733 trades on Wednesday on volume of $7.68 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $969.5 million to $7.27 billion on Thursday. The total is comprised of $3.43 billion competitive sales and $3.84 billion of negotiated deals.
